Ghana T-Bills Auction: Weak Bids Lead to 30% Undersubscription | Bank of Ghana Results

Introduction

In the most recent treasury bills auction conducted by the Bank of Ghana, investor participation remained subdued, resulting in a significant undersubscription of 30.45%. The government aimed to raise GH¢5.67 billion but secured only GH¢3.94 billion through bids on 91-day, 182-day, and 364-day treasury bills. This event highlights ongoing trends in Ghana’s fixed-income market, where investors are shifting toward alternative instruments offering higher yields. Understanding Ghana T-bills auctions is essential for investors navigating the country’s public debt market, as these short-term securities play a critical role in government funding and monetary policy.

Treasury bills, or T-bills, are short-term government debt instruments issued at a discount and redeemed at face value, providing a safe haven for investors while helping the government manage cash flow deficits. This auction’s weak bids underscore broader economic dynamics, including yield competition from other securities. Stay informed on Bank of Ghana T-bills auction results to gauge market sentiment and borrowing costs.

Analysis

The auction results reveal a clear pattern of low demand across all maturities, with total bids tendered falling well below the targeted amount. Investors submitted bids totaling approximately GH¢3.948 billion, compared to the GH¢5.679 billion goal, confirming the 30.45% shortfall. This undersubscription in Ghana T-bills auctions signals caution among local financial institutions and individuals, possibly due to attractive alternatives like corporate bonds or fixed deposits yielding more.

Breakdown by Maturity Periods

Demand was concentrated in shorter-term bills, with over 77% of bids for the 91-day T-bill. Specifically:

• 91-day T-bill: Bids tendered reached GH¢3.078 billion, with GH¢2.97 billion accepted.
• 182-day T-bill: Bids amounted to GH¢613.27 million, and GH¢608.2 million were accepted.
• 364-day T-bill: Bids totaled GH¢257.13 million, with GH¢254.13 million approved.

This distribution shows a preference for liquidity, as shorter maturities like the 91-day bill offer quicker access to funds amid economic uncertainty.

Yield Rates and Stability

Interest rates on the yield curve held steady, reflecting the central bank’s efforts to maintain predictability. Key yields included:

Unchanged yields suggest that while bids were weak, the government did not need to raise rates to attract participation, preserving borrowing costs.

Summary

The Bank of Ghana’s latest T-bills auction on November 24, 2025, ended with GH¢3.94 billion raised against a GH¢5.67 billion target—a 30.45% undersubscription. Bids favored the 91-day maturity, but overall demand lagged due to competition from higher-yielding options. Stable yields at 11.02% for 91-day, 12.66% for 182-day, and 13.08% for 364-day bills indicate market stability despite low turnout. This outcome affects Ghana’s short-term debt strategy and investor confidence in government securities.

Key Points

Practical Advice

For investors interested in Ghana treasury bills, these auctions offer low-risk opportunities backed by the sovereign guarantee. Here’s how to participate effectively:

Steps to Invest in T-Bills

1. Open a Brokerage Account: Use licensed primary dealers like commercial banks or securities firms registered with the Bank of Ghana.
2. Monitor Auction Calendars: Check the Bank of Ghana website for weekly auction schedules, typically on Fridays.
3. Submit Bids: Place competitive or non-competitive bids via your dealer; non-competitive bids guarantee allocation at the weighted average yield.
4. Assess Yields vs. Inflation: Compare T-bill yields (e.g., 11-13%) against Ghana’s inflation rate, currently around 20-25% in recent reports, for real returns.
5. Diversify Maturities: Balance 91-day for liquidity and 364-day for higher yields.

Retail investors can access T-bills through mobile apps from banks like Stanbic or Ecobank, making entry barriers low. Aim for auctions with strong historical subscription to minimize rollover risk.

Points of Caution

While T-bills are among the safest investments in Ghana, recent weak bids highlight risks:

• Rollover Risk: Undersubscription could force higher future yields, increasing government debt servicing costs.
• Opportunity Cost: Yields may lag inflation or alternatives like cocoa bills (up to 25-28% yields).
• Liquidity Constraints: Secondary market trading exists but volumes are thin; hold to maturity preferred.
• Currency Risk: For foreign investors, cedi depreciation impacts returns.
• Policy Shifts: Monitor Bank of Ghana monetary policy committee decisions for rate changes.

Always verify auction results directly from official sources to avoid misinformation.

Comparison

Ghana T-bills serve as benchmarks for the fixed-income market. Here’s how they stack up:

T-Bills vs. Other Ghanaian Instruments

T-bills offer superior safety but lower yields, explaining the shift to cocoa bills during undersubscribed auctions. Unlike bonds, T-bills have no coupon payments, appealing to liquidity-focused investors.

Legal Implications

T-bills auctions in Ghana operate under the Bank of Ghana Act (Act 612 of 2002) and Public Financial Management Act (Act 921 of 2016), mandating transparent issuance for domestic debt. No legal violations occurred in this auction, as undersubscription does not breach regulations—it simply reflects market dynamics. Investors must comply with Securities Industry Act (Act 929) for bidding through licensed dealers. Tax implications include a 15% withholding tax on interest income for residents, withheld at source.

Conclusion

The persistent weak bids in Ghana’s T-bills auctions, culminating in a 30.45% undersubscription, point to evolving investor preferences amid competitive yields elsewhere. With GH¢3.94 billion raised at stable rates, the government maintains funding access, but sustained trends could pressure fiscal policy. For stakeholders, tracking treasury bills Ghana metrics via Bank of Ghana reports is crucial. This event reinforces T-bills’ role as a cornerstone of Ghana’s debt market, offering education on safe investing while highlighting the need for diversification.

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